Freedom's False Ring

August 20, 2007

Rudy Giuliani says, "Preserving and extending American ideals must remain the goal of all U.S. policy, foreign and domestic," and he's not alone. Lots of our leaders think everyone should want what we want. Saying otherwise puts you among President Bush's vile "some," who deny that "every time people are given a choice, they choose freedom." Yet people--even Americans--sometimes don't, and forcing them can prove disastrous. Or such is the theme of a brace of new books by a couple of non-Americans nervous about U.S. ambitions to Americanize the world.

Presumably we should preserve and extend American ideals because they made us what we are. But if American history provides a script for becoming rich and free, how do you follow it? Postpone an end to chattel slavery for around 100 years and implementation of universal suffrage for around 200. Put off having a proper central bank until you're already among the richest nations of the earth, protect manufacturing industry from foreign trade with high tariffs until you're indisputably the richest nation, and display a fine disregard for the intellectual property of foreigners until you hold most of the worthwhile patents. Delay creation of a merit-based civil service for more than a century. Restrict the movement of foreign capital, and invest enormous public resources in education and state-funded enterprise.

Surveying this record, Cambridge economist Ha-Joon Chang says in Bad Samaritans that you can learn lessons about economic development from American history, but the benefits of free trade, free enterprise, democracy, and strong protection for private property are not among them. During the years when the United States developed industrial strength, Americans avoided free markets and, indeed, democracy. Yet nowadays the United States, along with the United Kingdom, the International Monetary Fund, and other major financial players, now prescribes free trade and a general withdrawal of the state from the economy as the only method of economic development, defying the actual history of today's rich nations.

Chang points out rather engagingly that he is himself, in terms of material progress, a 250-year-old man: Born into a South Korea whose economic development was something on the par of eighteenth-century England, he has in 44 years of life witnessed his country undertake more than two centuries' worth of modernization. And it happened without South Korea adopting the package of market institutions Washington now prescribes. South Korea, like Singapore and some other successful countries, leans far more heavily on state-owned enterprise and industrial policy than countries like Argentina, which are supposed to have failed because they have too much government intervention in the economy.

If the one-size-fits-all "Golden Straitjacket," as Thomas Friedman calls it, of free-market institutions didn't, as a matter of historical fact, provide the basis for economic growth in the United States, United Kingdom, Singapore, South Korea, or Japan, then rich countries should not foist it so readily on developing nations today, Chang argues. His empirical case is sound: Industrial policies and interventionist states can work--and have worked--along with economic development. This doesn't mean developing nations should do exactly what the United States did--not every country has lots of rich ore deposits, timber resources, fertile soil, and enough people willing and able to exploit them. But it means Friedman should keep his straitjacket to himself. Countries should be allowed to adopt protectionist or interventionist policies and succeed or fail according to their own abilities. Democracy and free markets will follow material success: "Culture is the result, as well as the cause, of economic development," Chang writes.

Underneath Chang's calm and even cheerfully clear prose, there is a grim belief that poor countries are often not nice places, and won't be until they're not so poor. In Black Mass, London School of Economics philosopher John Gray argues they might not become so nice even then.

The Golden Straitjacket policies together make up what Gray and many non-Americans know as neoliberalism, i.e., neo-classical-liberalism--a faith that markets are so efficient that they must replace all other methods of distributing goods. And when Gray uses words like "faith," he means them literally: "Theories of modernization are not scientific hypotheses but theodicies--narratives of providence and redemption--presented in the jargon of social science." The Golden Straitjacket parable says pain today means salvation tomorrow--it's religious, or more precisely millenarian: It tells us how to achieve universal peace on earth.

Neoliberal millenarianism, Gray writes, defeated itself. Using Margaret Thatcher as an example, he observes that unleashing the free market takes a great deal of state power, and produces unpredictable results. Thatcherites thought they would create a neo-Victorian Britain--that a new bourgeois culture would result from economic success. Instead, Gray writes, "Post-Thatcher Britain is a less cohesive society than the one she inherited, but it is also more tolerant--unbothered about 'family values', no longer pervasively homophobic, less deeply racist and (though markedly more unequal) not so fixated on issues of class." From neoliberalism's failure to produce a more moral society grew neoconservatism.

Neoconservatives like free markets but recognize that commerce cannot bring about the good society on its own. "[T]hey understand that while capitalism is a revolutionary force that overturns established social structures and topples regimes this does not happen by itself--state power and sometimes military force are needed to expedite the process." Gray's neoconservatives share more with Lenin or Robespierre than with old conservatives like Burke or Disraeli. They're trigger-happy neoliberals impatient for revolution.

Gray sees Iraq as an effort to hasten utopia's advent by force. Under the specter of terrorism, George W. Bush and Tony Blair decided to use force to expedite the progress of history in Iraq. They forcibly removed an obstacle to freedom, believing "democracy would come about simply through the overthrow of tyranny." They acted in faith--as Gray quotes Blair, "I only know what I believe."

As Gray points out, history might have shaken such faith: "spontaneously evolved social institutions are rarely liberal." Facing a nasty, brutish, and short life, people choose accordingly. But Gray thinks more state power won't help. America hasn't the traditions, institutions, or independent wealth to force its will on the world. Like Chang, Gray sees developing countries doing as the United States did, not as it says, using the tools of the sovereign state to preserve national security, not to promote free markets.

Seeing twin failures of peaceably utopian neoliberalism and militarily millenarian neoconservatism, Gray argues for old conservatism: "the gravest human disorders cannot be remedied, only treated day by day." He knows it is a dull proposal: "Preserving the hard-won restraints of civilization is less exciting than throwing them away in order to achieve impossible ideals." It is, according to Chang, what the United States did during the "Good Samaritan" phase from World War II through the end of the cold war: amid exploding dreams the half-measures of normalcy provide better shelter than the unattainable paradise.